GBPJPY interim rallies attempt to spike above 7-DMAs, but that is where the spinning top pattern has occurred at 147.354 levels to restrain the rallies below DMAs (refer daily chart).
The pair has been tumbling into deep tunnels ever since the formation of shooting star at peaks of rallies at 153.841 levels which is exactly at rising wedge resistance line (refer weekly chart).
While same has been the case in the minor trend of this pair, shooting star has occurred at every now & then. Shooting stars have occurred at 155.507, 151.272 and 149.970 levels and observe the price behavior subsequently (refer daily plotting).
While the pair also forms dragonfly doji at 149.730 levels. Accordingly, we had already warned in our previous write-up that even though the bullish pattern evidences minor rallies, the momentum not convincing. Thereby, you’ve seen price slumps so far.
For now, the current prices are well below DMAs despite the mild upswings from last two days in this week.
While the consolidation phase is also restrained below EMAs, while the intermediate trend of this pair has breached rising wedge support and bears in the major trend have resumed showing their functions.
Just observe as and when shooting star patterns pop up at wedge resistance to signal weakness, accordingly, the considerable slumps are seen (refer weekly plotting).
For now, more price dips seem to be on cards as both leading and lagging oscillators on both daily and weekly timeframes are in bears' favor, the breach below strong support is also substantiating this bearish standpoint.
Trade tips: On trading grounds, contemplating above technical reasoning, the double touch put option trades are recommended, at spot reference: 146.695 levels, we advocate buying put options for the strikes upto 144.234 levels in which the options trader reckons that the price of the underlying spot FX would hit these strikes before the option expiration time.
Alternatively, on hedging grounds, we advocate shorting futures contracts of near-month tenors as the underlying spot FX likely to target southwards 142.249 levels in the medium run.
Writers in a futures contract are expected to maintain margins in order to open and maintain a short futures position.
Currency Strength Index: FxWirePro's hourly GBP spot index has turned into 94 (which is bullish), while hourly JPY spot index was at shy above -10 (neutral) while articulating (at 05:54 GMT). For more details on the index, please refer below weblink:
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